Major automakers urge Trump administration: don't ditch NAFTA

DETROIT (Reuters) - Global automakers on Monday urged the Trump administration not to terminate the North American Free Trade Agreement and expressed hope the United States, Canada and Mexico can successfully conclude a modernized and improved trade pact.

A general view of the Detroit skyline, dominated by General Motors headquarters (R), is seen from Windsor, Onatario, Canada January 14, 2018. REUTERS/Jonathan Ernst

Fiat Chrysler Automobiles NV (FCA) Chief Executive Sergio Marchionne, who announced last week plans to shift heavy pickup truck production from Mexico to Michigan by 2020, said he hoped the Trump administration would “retune” some of its trade talk demands.

Trump has threatened to withdraw from NAFTA, which is heavily utilized by automakers that have production and supply chains spread across the three countries.

Marchionne, speaking at a news conference at the Detroit auto show, said FCA’s truck production shift in part “goes a long way I think in addressing some of President Trump’s concerns about the dislocation of production capacity out of the United States.”

That decision reduces the risk those trucks would be hit with a 25 percent tariff if NAFTA unravels.

Lentz said since NAFTA was agreed 14 auto plants have been built in the United States – eight by Toyota – and 11 in Mexico.

“It’s not like we are not investing in the United States,” Lentz said.

Marchionne also said the 85 percent figure is not feasible. “I’m hopeful that we’ll see a more rational number going forward and if it is more rational, then I think we’ll be able meet the standard,” he said.

A NAFTA breakup would raise costs, slow demand and put U.S. jobs in jeopardy, Lentz said.